Efficiency denotes ‘doing more with less’ but sometimes is used as a euphemism for cuts. This is not how we approached the issue. Rather, our yardstick was the quality of life of people receiving the services (that is, the users themselves). Higher quality of life equals higher efficiency. Simple.

Even if we focus on quality of life, we could think of efficiency in terms of either how to spend the least to generate a given level of quality of life or how to generate the most quality of life with the given bundle of resources available. We chose the latter approach. Focusing on spending the least would distract efforts away from people in need towards objectives expressed in expenditure items, sterling pounds, delivery contract clauses and the like. Instead, by focusing on making the most with what’s available we can learn about what may be behind that which matters to users of social care services and their families: their quality of life in relation with the care they get. Continue reading →

We carried out a piece of research which studied whether the proportion of older residents in lower super output areas (LSOA) in England receiving disability living allowance and attendance allowance was statistically related to the degree of income poverty among older people in the area. (LSOAs are geographical areas with a mean population of 1,500 people; there are 32,482 LSOAs in England). The paper was peer-reviewed and was just published in the Journal of Maps (http://www.tandfonline.com/doi/abs/10.1080/17445647.2012.695441).

We applied a number of spatial econometric techniques, given the geographical nature of the data. The data for beneficiaries come from the Department for Work and Pensions. Income poverty among older people is one of the indicators compiled by the Social Disadvantage Research Centre at the Department of Social Policy and Social Work at the University of Oxford. The estimates of total population by age are from the Office for National Statistics.

We found a greater concentration of DLA and AA recipients over state pension age living in deprived areas than in more affluent areas: nearly 30 per cent older beneficiaries live in the 20 per cent poorest of areas and approaching two thirds live in the poorest half of areas.

Even after accounting for significant spatial effects, we still found a strong, positive relationship between proportion of beneficiaries and proportion of older people in poverty .

These allowances are therefore benefiting more deprived communities.

The study does not allow us to affirm that the allowances are directly benefiting older people in lower income. However we can conclude that these benefits, although not means-tested, would be partially addressing the geographical inequalities in income of older people across England.

Reducing or eliminating these benefits would hit the harder the poorer the neighbourhood.

Last year, Age UK helped 500,000 people put £120million back in their pockets through free benefits information and advice. This year, we will continue to break down the barriers that prevent people from claiming, in particular older people not realising that they are eligible for some additional income. For more information, please visit www.ageuk.org.uk/moremoney

Last Thursday, George Osborne, Chancellor of the Exchequer, and the Governor of the Bank of England, Mervyn King, jointly announced a new measure to stimulate economic growth. They also, importantly, did not rule out more quantitative easing.

Mr King prescribed a recipe of subsidised credit, estimated to be worth about £80bn –already known as ‘funding for lending‘. Technically, it consists of auctions by the Bank of England of loans totalling a minimum of £5bn a month for 6 months at a minimum rate of the Bank Rate plus 25 basis points (currently 0.75 per cent).

They feel this is required because the volume of loans to non-financial companies has been falling since the onset of the crisis: the chart below shows that less money has been loaned than the month before, almost every month, since February 2009.

The funding of the social care system is very much up in the policy and political agenda, but it is seldom related to or put into the context of informal, voluntary caring. Let’s have a look at some numbers.

Public spending on social care services on people aged 65 and over, net of any fees and charges paid by clients, amounted to roughly £7.5 billion in 2010. This includes the assessment and care management, the placements in nursing and residential care homes, the provision of supported accommodation, home care and day care services, equipment and adaptations, community meals and other community services, as well as any direct payments.

We looked into the Survey of Carers in Households in England 2009/10, which reports the prevalence of informal caring –that is, excluding people providing care in a professional capacity. In this survey, carers are defined as those people who identify themselves as having extra responsibilities of looking after someone who has a long-term physical or mental ill health or disability, or problem related to old age.

The survey shows that around 8 per cent of people aged 65-69 provide informal care for at least 20 hours a week (the preferred measure for statistical reasons), and this figure goes up to 15 per cent among those aged 75 or over. Incidentally, only 3 per cent of informal carers look after someone due to old age.

Using the population estimates from the ONS, we estimated that around 1 million people aged 65 and over are providing care for at least 20 hours a week -equivalent to 11% of all people in this age group.

If we adopted the most conservative figure of only 20 hours a week (and remember that the survey measures ‘at least 20 hours’), we would estimate that in a whole year, people aged 65 and over provide around 1.04 billion hours of informal, voluntary care.

When economists are pressed to translate voluntary care in monetary terms, we tend to use the minimum wage, which currently stands at £6.08 an hour. Multiplying the minimum wage by the number of hours of informal caring annually provided by the 65 plus, we get a grand total of £6.3 billion. That is, £6.3 bn worth of services foregone by older people. Over six billion pounds that are not computed in the gross domestic product, and that tend to go unnoticed in the current discussions about the care system.

More to the point, it is equivalent to 84 per cent of total net expenditure on social care on older people. In other words, the 65 plus are generating for free services equivalent to 84 per cent of all the public spending on social care on this very age group. 84 per cent! And that’s a very conservative estimate…